Use the following demand and supply functions: Demand: Supply: Equilibrium price and output are

Question

Use the following demand and supply functions: Demand:  Supply:  Equilibrium price and output are

Quizplus · Accepted Answer

To find equilibrium price and output, we need to set the demand and supply functions equal to each other:
11 - 0.2P = 0.1P - 1
Simplifying this equation, we get:
0.3P = 12
P = 40
Substituting P back into either the demand or supply function, we can find the equilibrium quantity:
Q = 11 - 0.2(40) = 3
Therefore, the equilibrium price and output are P = $40 and Q = 300. 
Choice B is the closest to this answer, with P = $10 and Q = 300, so it is the best choice.

Use the Following Demand and Supply Functions: Demand: Supply